Correlation Between Eaton Vance and Health Care
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Health Care at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Eaton Vance and Health Care into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Atlanta and Health Care Fund, you can compare the effects of market volatilities on Eaton Vance and Health Care and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Eaton Vance with a short position of Health Care. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Health Care.
Diversification Opportunities for Eaton Vance and Health Care
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eaton and HEALTH is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Atlanta and Health Care Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Health Care Fund and Eaton Vance is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Eaton Vance Atlanta are associated (or correlated) with Health Care. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Health Care Fund has no effect on the direction of Eaton Vance i.e., Eaton Vance and Health Care go up and down completely randomly.
Pair Corralation between Eaton Vance and Health Care
Assuming the 90 days horizon Eaton Vance Atlanta is expected to generate 1.1 times more return on investment than Health Care. However, Eaton Vance is 1.1 times more volatile than Health Care Fund. It trades about 0.16 of its potential returns per unit of risk. Health Care Fund is currently generating about -0.09 per unit of risk. If you would invest 3,365 in Eaton Vance Atlanta on September 2, 2024 and sell it today you would earn a total of 280.00 from holding Eaton Vance Atlanta or generate 8.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Atlanta vs. Health Care Fund
Performance |
| Timeline |
| Eaton Vance Atlanta |
| Health Care Fund |
Eaton Vance and Health Care Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Health Care
The main advantage of trading using opposite Eaton Vance and Health Care positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Health Care can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Health Care will offset losses from the drop in Health Care's long position.| Eaton Vance vs. Eaton Vance Msschsts | Eaton Vance vs. Eaton Vance Municipal | Eaton Vance vs. Eaton Vance Municipal | Eaton Vance vs. Eaton Vance Municipal |
| Health Care vs. Banking Fund Class | Health Care vs. Basic Materials Fund | Health Care vs. Biotechnology Fund Class | Health Care vs. Government Long Bond |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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